A contract whereby only one party is bound to perform is known as what type of contract?

A contract whereby only one party is bound to perform is known as a unilateral contract. In this type of agreement, one party makes a promise that is open to anyone who chooses to accept it by performing a specific action. This means that the obligation to fulfill the terms of the contract rests solely on one party, while the other party is not legally obligated to perform anything unless they choose to accept the offer, typically through their action or performance.

A classic example of a unilateral contract is a reward offer, such as offering a sum of money for the return of a lost pet. The person who places the ad is obligated to pay the reward only when someone successfully returns the pet, thereby accepting the offer through their action.

Other types of contracts, like mutual or bilateral contracts, involve an exchange of promises between two parties, where both are bound to perform certain duties. Conditional contracts have stipulations that must be met for the contract to remain effective, which also implies mutual responsibilities rather than a one-sided obligation.